Bankrupt Geoffrey Edelsten accused of concealing his assets

Ben Butler, Chris Vedelago

Disgraced businessman Geoffrey Edelsten has admitted to spending $63 million in less than two years, squandering his fortune on high living and ''stupid'' investments.

The massive loss, and Mr Edelsten's claim he had only $90 in cash when he filed for bankruptcy in the US in January, is likely to raise questions with creditors, including the Tax Office, about how he is paying for his lavish lifestyle with new girlfriend Gabi Grecko, a 24-year-old model, DJ and aspiring TV star.

Mr Edelsten's admissions about his dire financial state have been made in a US court where he is fighting a desperate bid to retain control of his estate, which he estimates could be worth as little as $1 million after his debts are paid.

On Friday, Mr Edelsten's estranged American business partners, the Mawardi family, asked a Florida judge to appoint an independent trustee to oversee control of the estate amid claims Mr Edelsten has been concealing assets and making a ''farce'' of the bankruptcy proceedings.

Advertisement

Fairfax Media can report that Mr Edelsten has failed to disclose to the court the extent of his ownership in a fleet of luxury cars worth at least $3 million.

In sworn testimony in February, Mr Edelsten claimed to have five cars, including an Aston Martin, Lamborghini and a Range Rover.

But financial records show Mr Edelsten also has an interest in two Ferraris, a 1930 Packard roadster and a Mercedes Benz CL65.

The fleet is mortgaged to a company run by his long-time friend and accountant, Lindsay Hosking. The company, Highgate Road, is at the centre of the bitter legal stoush with the Mawardi family, who allege it was used in sham transactions designed to cheat them in real estate deals with Mr Edelsten.

The former doctor's penchant for high living was also questioned in court, with Mr Edelsten admitting he owned ''20 to 25'' cars in early 2012 and spent ''extraordinary'' amounts on clothing for then wife Brynne at fashion label House of Nurielle in Las Vegas.

It was there that Mr Edelsten said he met and ''consummated'' his ill-fated business relationship with the Mawardi family, which saw him pump more than $22 million into ventures that included the fashion house, low-rent apartment complexes and a casino in the Dominican Republic.

Mr Edelsten said it wasn't long before he had spent all of the $28 million he received from the sale of four medical centres in 2011. ''Squandered would be a better term,'' he said. ''Splurged.''

The 71-year-old told the court his investment strategy had been ''stupid'' but he had been a victim of predatory behaviour by the Mawardis.

Mr Edelsten was also grilled about how he was meeting his expenses given he had only $90 in cash when he filed for bankruptcy. ''I borrowed funds from my mother,'' he said.

Mr Edelsten declined to comment on how he was paying for his lifestyle.

''I have no comment to make about my financial affairs other than I am endeavouring to recover my and affiliates' $27 million in the USA which is proceeding satisfactorily and my affairs are under control,'' Mr Edelsten said. ''I personally own no cars.'' He also said that he expects to be vindicated shortly in an indirect criminal contempt proceeding brought in the US courts.